Good records help monitor how healthy your business is. By keeping good records, you can analyse your cash flow, demonstrate to lenders, accountants and businesses your financial position.
Be sure to watch the video below about GST and record keeping put out by the ATO.
Your records must:
- Be in english
- Be in writing
- Explain all transactions
- Be kept for 5 years
Debtors are clients who owe your business money. Keeping track of who owes money to your business will help you control your cash flow of your business.
**You need a list of debtors at 30 June for tax purposes**
Creditors are suppliers which your business owes money to. Controlling when you pay your creditors and how will help you keep control of the debt your business owes. **You need a list of creditors at 30 June for tax purposes**
When starting a business, you should open a bank account for your business. It’s a good idea to keep your personal expenses separate from your business expenses. This keeps your records tidy as you need to keep records of all your transactions going in and out your business accounts.
INCOME AND EXPENSES
Monitoring and recording your transactions going in and out of your business is essential. You need to understand where and how your expenses are spent throughout the year. When you carry on a business, you need to be able to explain how your expenses relate to the business during the tax year.
If you are using a paper system, it a good idea to keep your tax invoices and receipts in a filing system which enables you to find receipts easily. I like to use manila folders from A – Z. Invoices are filed alphabetically with purchase orders attached to their corresponding invoices for tracking purposes.
When I used a paper system, I liked to keep each year separate, so I could archive each year once it is over. This way, I was able to keep my records neat and tidy.
Today I keep my records electronically. I use app’s to upload my receipts/bills into my chosen software and these are saved online in my data file. This has saved time, kepting my records without having to file and archive them later. It has also freed up important space in my office!
Assets must be treated differently from the every day transactions of a business. It’s a good idea to have an “asset register”. This can be as simple as scanning and having a folder on your computer which you save each invoice relating to assets. These need to be kept for the lifetime of the asset or 7 years after you have sold the asset.
Today, software providers have a ‘file’ in the software. I now save my asset register in my ‘file’ electronically in my software. This way, my accountant can have access to these at any time as well.
Looking for help with your record keeping? Call Veronica 0439 821 095